The complexities of Medicare Advantage and the Affordable Care Act can be daunting. But with the right knowledge and tools, you can maximize your reimbursement through risk adjustment coding.
Health plans rely on accurate medical record documentation and diagnosis coding to calculate risk scores for their enrollees. This process helps level the playing field between payers and providers.
What is Risk Adjustment?
Risk adjustment is a market intervention to counter adverse selection in health insurance markets. It does so by reducing premiums across plans vulnerable to adverse selection problems, such as those caused by enrollees who may be more likely to have chronic diseases or other financial burdens.
This policy is used on Medicare, and Medicaid managed care programs and on Marketplaces created under the Affordable Care Act, in which members enroll in private health plans through an online insurance exchange. In both of these settings, CMS uses a method to calculate risk adjustment payments to insurers using demographic information and claims for specific medical diagnoses.
Hierarchical Condition Categories (HCCs) are the basis for HHS’s calculating risk scores. Body systems or disease processes group these conditions with similar cost patterns. Then, they are categorized by the likelihood that they will cause long-term healthcare costs to exceed a certain percentage of the average plan spending.
Once the HCCs are arranged, CMS can compare the cost of each condition against the average of all plans in a geographic area and market segment. It then adjusts the risk score for each of the individual plans based on the difference in cost.
The Medicare risk adjustment timeline is complicated and requires a team to submit all encounters and supplemental data accurately and on time. Encounter submissions are particularly important for chronic disease management and Medicare Advantage beneficiaries. These members often have multiple conditions affecting their overall health status and must have them captured accurately to receive their full Medicare reimbursement.
Capturing and documenting chronic conditions involves more than simply submitting claims to the program; it also requires a strategic and engaged partnership between providers and health plans. Suppose a health plan optimizes its EMR, data, analytics, and education to support quality and effective documentation of chronic conditions. In that case, it can ensure accurate, compliant, and positive risk adjustment payments and foster strong provider engagement, which can help positively impact the health of its members.
Hierarchical Condition Categories (HCCs)
In a world where reimbursements are increasingly tied to outcomes, the ability to accurately and precisely capture patient complexity is critical. This is where hierarchical condition categories (HCCs) come into play.
HCCs are a key part of the CMS risk adjustment model that scales Medicare Advantage payments based on the unique health needs of each patient. Unlike traditional fee-for-service Medicare payment models, which only pay for services rendered, the value of care in this new model is tied to a patient’s level of risk and complexity.
The risk adjustment process leverages ICD-10 diagnoses to delineate patients’ complex medical conditions, allowing payers to calculate risk-adjustment factors that factor into the payment value of a patient’s care. These factors are based on analyzing the patient’s diagnoses and demographic information.
These codes are critical to maximizing your Medicare Reimbursements because they help CMS accurately predict how much a patient will cost to care for over time. In addition, HCCs help to ensure that providers and payers have the information they need to make smart, informed decisions regarding a patient’s care.
To be eligible for HCC scores, doctors and other healthcare providers must document all the ICD-10 diagnoses impacting a patient’s condition and provide the appropriate documentation to support those codes. Failure to do so can reduce Medicare reimbursements and affect your overall MIPS score.
HCC coding can improve your MIPS score and even lead to additional patient bonus points. This type of coding improvement can also be used to help qualify for other CMS programs, such as the Quality Payment Program.
Predictive Modeling
Predictive modeling is one of the most popular ways businesses make informed decisions. It uses statistical methods to predict future outcomes based on historical and existing data. The models generated using predictive modeling often have high accuracy rates and are used in everything from predicting airline traffic volume to calculating credit risk and corporate earnings.
Predictions are usually calculated in real-time; this makes them useful for businesses that need to know how a customer or a transaction will turn out before it happens. However, because predictions are made based on assumptions and changes in incoming data, they must be updated or recalculated regularly to account for any new information.
In the healthcare industry, doctors rely on predictive analytics to help them identify patients with atypical symptoms and provide them with specialized treatment plans. For example, if a patient’s lungs are not working properly, doctors may need to send them to a hospital for further testing and procedures to diagnose the condition.
